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Taco Bell opens its hotel, just as change comes

The Mexican chain has become one of the top-performing concepts in the country thanks to its marketing, but now it faces new leadership.
Taco Bell
Photograph courtesy of Taco Bell

On Thursday, Mexican fast-food chain Taco Bell opened up one of the more ambitious marketing strategies in its history.

The Bell: A Taco Bell Hotel and Resort, opened in Palm Springs, Calif., with a curated entertainment menu, a salon with hair styles such as “Cinnamon Twist Braids,” a Taco Shop and sauce packet floaties for the pool.

Demand for the hotel, itself a limited-time offer, was so strong it sold out of rooms in just two minutes.

“I probably had more customer complaints about how they couldn’t get a room at the hotel than I’ve had on anything in Taco Bell in the past five years,” Greg Creed, CEO of parent company Yum Brands, said last week. “So, I think they’re doing very well.”

Taco Bell gift shop

The Taco Shop at The Bell: A Taco Bell Hotel and Resort/Photograph courtesy of Taco Bell

That The Bell would prove popular is no surprise. Taco Bell might be one of the more under-the-radar success stories in the restaurant space, and has done so by thinking outside the bun, if you will.

Same-store sales have risen 20 of the past 21 quarters, a period in which the key industry metric has averaged nearly 4%, including 7% growth in the second quarter ending June 30. That’s impressive for a chain that sits as one of the five largest restaurant concepts in the U.S.

System sales increased 33% between 2013 and 2018, according to Technomic's Top 500 Chain Restaurant Report data. Technomic is a sister company of Restaurant Business.

The company has done this largely on the backs of innovative marketing that generates buzz, combined with a menu that offers a unique combination of value and innovation. It is also unique among large chains, with no nationwide competitor in its price point.

Taco Bell Hotel Room

Hotel room at The Bell/Photograph courtesy of Taco Bell

For all of that success, however, Taco Bell now faces a shift in leadership and now faces a challenge of maintaining its momentum under a new brand CEO.

Former CEO Brian Niccol left the company in 2018 for Chipotle Mexican Grill, where he has engineered an impressive turnaround—using strategies similar to those used at Taco Bell. In the more than a year since Niccol left, Julie Felss Masino, president of Taco Bell North America, and Liz Williams, president of Taco Bell International, co-led the chain while Marisa Thalberg was its chief brand officer.

But last week Taco Bell named former Adidas executive Mark King to be its CEO. Masino and Williams will report to him.

Thalberg opted to leave the Mexican chain, becoming a strategic adviser for Yum Brands before she departs completely. She announced the decision on her LinkedIn page.

Thalberg was behind some of the chain’s more innovative marketing strategies. She was hired at the company from Estee Lauder in 2015 and was named chief marketing officer the next year and then chief brand officer in 2018.

Thalberg helped the company launch campaigns such as Nacho Fries—using a recurring ad campaign, “The Belluminati,” mocking the idea that only burger chains can sell fries. The company also generated strong results with its "Steal a Game, Steal a Taco" promotion during the NBA Finals. 

Taco Bell Nacho Fries

Taco Bell Nacho Fries/Photograph courtesy of Taco Bell

In the process, Thalberg was recognized in multiple industry lists featuring the most powerful people in the restaurant industry—including the Restaurant Business Power 20.

She leaves Taco Bell with plenty of marketing momentum, thanks to that hotel, which will feature menu test items, unique drinks, sunset music performances and poolside movies featuring chipotle butter popcorn with Verde seasoning.

Taco Bell fans from 21 states were lucky enough to score reservations to the hotel during that two-minute period. Some of those who couldn’t took their complaints directly to Creed.

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